Press Conference by Kaoru Yosano, Minister of State for Economic and Fiscal Policy and Financial Services

(Excerpt)

August 25, 2006

Q.

In relation to the money lending industry, many members of the expert panel, which convened yesterday, argued against preferential measures for short-term loans in small amounts. Please describe the pros and cons of the preferential measures and the appropriate way to implement them.

A.

I have long considered that preferential measures for short-term loans in small amounts are inconsistent with the objective of the latest legal amendments, if making an exception leads to turning an exception into a non-exception. On the other hand, if a matter is to be transferred from one system to another, it is necessary to take measures to enable each party to gradually adapt to it. A rough draft will be submitted to me by the Financial Services Agency (FSA) this afternoon, although the content has not been finalized yet. Discussions will be held based on the draft, and the FSA will draw an interim conclusion of some kind and make a presentation to relevant study groups and subcommittees of the ruling parties where further discussions can be pursued.

Q.

Mizuho Securities is claiming damages against the Tokyo Stock Exchange (TSE) for the erroneous order of J-Com shares. Some people have stated that it could be a huge blow to TSE, in consideration of its financial position. What are your thoughts on this?

A.

It will undoubtedly be a blow if TSE really has to pay ¥40 billion. Both parties initially had the intention to resolve the issue by negotiation, but it is more transparent and objective to settle the matter in a court of law through public trial than by negotiation. I believe their aim is to resolve the issue in an open court based on the view that they could fulfill their accountability by doing so, rather than settling by negotiation, which would be nontransparent and involve difficulties in providing an explanation in the subsequent process. I have no idea what kind of outcome will be reached, but naturally, this is one of the key approaches to resolving the issue.

Q.

Some press reports state that the process of finding new owners of Ashikaga Bank, which is currently being nationalized temporarily, will commence shortly. Please comment on this.

A.

In actual fact, there has been less progress in the situation than reported by the press. While it is true that there have been developments or signs of maturity in the framework to move on to that stage, definite progress has not been made in that direction as reported by the press.

With that said, I feel that the time is becoming increasingly ripe.

(End)

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